Friday, November 15, 2013

Here is definitive proof - if any was needed - that the Gallic fit-throwing that burned the possibility of an interim Iranian nuclear deal last week in Geneva was completely pointless.

The key "concern" expressed by Israel-firster French Foreign Minister Laurent Fabius to derail an interim deal was about the Arak heavy-water reactor.

Well, UN inspectors this week reported that they had detected no

new developments in Arak over the three months since August. [1]

The head of the International Atomic Energy Agency (IAEA), Yukiya Amano, was also in Tehran on Monday, and - unusually for his trademark paperboy role for Washington - had nothing to complain about.

Fabius used the Arak gambit at the last minute in Geneva to derail the talks, provoking the ire of even fellow European diplomats. That was out of pure disinformation; Tehran was already doing what Fabius insisted they were not doing.

A EU diplomat (non-French) confirmed to Asia Times Online that Iranian Foreign Minister Mohammad Javad Zarif had already informed US Secretary of State John Kerry about these euphemistically defined "confidence-building measures". Kerry was fully aware before he landed in Geneva on his way to sign an interim deal.

But guess what: the French were clueless. Kerry did not tell anybody else on the P5+1 table (comprising the United States, Britain, France, China, Russia and Germany) because he feared any leaks. This proves once again that this infinitely complex negotiation is really between Washington and Tehran. Russia and China are behaving - so far - as sort of quiet (and wary) observers. Yet Kerry, Francophile that he is, should have know better about Gallic peacock instincts.

Fabius - acting on orders of "popular" (26% and sinking) President Francois Hollande - started to pre-emptively torpedo the negotiations even before Kerry landed in Geneva. Arak was the perfect pretext to shade France's true agenda; to act as an agent of Israeli Prime Minister Bibi Netanyahu and to secure future fat contracts from those paragons of democracy, the Wahhabi-dominated Gulf Counter-revolution Club, aka the Gulf Cooperation Council (GCC).

So Fabius was not only totally clueless about privileged Kerry-Zarif information; he felt like a spurned lover (Moliere to the rescue).

Make no mistake. Kerry - following President Barack Obama's brief - badly wants a deal. But as this is a P5+1 affair, he simply cannot out the French as spoilers. Thus the subsequent tactic earlier this week of "blaming" Iran - as in "they were not ready for a deal yet".

Assorted European diplomats have been spinning, off the record, that yes, there was a nearly done deal, but the Iranian delegation still had to go back to Tehran to get ultimate approval from Supreme Leader Ayatollah Khamenei. That's exactly the line that Kerry followed during the week.

The whole saga restarts next Wednesday. There is no question Iranian President Hassan Rouhani and Foreign Minister Zarif made sure the IAEA would be able to attest, from inside Iran, that goodwill is still the name of the game. This is how they controlled their own opposition - the hard line Revolutionary Guards.

Heavy water Arak is not the problem. Heavy Gallic posturing is. Let's see whether the Fabius reactor will leak again next week, or whether Kerry will be able to contain it.

China's development strategy up to 2022.

Myself and Francesco Sisci - check out his

companion piece as well - we're just two foreign

barbarians trying to make sense of the

earth-shattering moves ahead.

The Gang of Seven in Beijing is now ready

to step on the gas - big time.

THE ROVING EYEChina's market enigmaBy Pepe Escobar

"The focus of the restructuring of the economic system ... is to allow the market [forces] to play a 'decisive role' in the allocation of resources."

That's it? The whole world was breathlessly waiting - and this is what the world got: an enigma enveloped in a riddle inside a Chinese box, in the form of a cryptic communique issued by the long-awaited Third Plenum of the 18th Chinese Communist Party (CCP)'s Central Committee.

To know who is ultimately responsible for this - the first serious policy blueprint unveiled by the new Chinese leadership of President Xi Jinping and Premier Li Keqiang - one just needs a glimpse at the photo: these are the seven members of the

Politburo Standing Committee, the men who really rule China. And what's at stake could not be more serious; no less than thestrategic choices addressing China's inevitable ascension to the status of world's number one economy.

One should always remember how the CCP works. The Plenum was supposed to "forge consensus" among the CCP elite and set the tone for the next stage of China's breakneck development.

And yet anti-climax seems to have become the operative concept here. The media frenzy in China, pre-Plenum, had been relentless - of a "change we can believe in" variety (no, nothing to do with American-style billion-dollar political campaigns). After all, the number 4 in the Politburo Standing Committee, Yu Zhengsheng, had publicly promised "unprecedented" reforms, leading to a "profound transformation in the economy, society and other spheres".

The frenzy was mostly generated by a reform road map published by the State Council's Development Research Centre - the so-called "383 plan". In trademark Chinese numerology, the road map delineated the "three-in-one train of thought, the eight key areas and the three projects of reform". The secret of a successful reform would be "the proper handling of the ties between the government and the market".

One of the authors of the report, Liu He, director of the Central Leading Group on Financial and Economic Affairs and a deputy director of the National Development and Reform Commission, actually became a superstar. And just before the Plenum, President - and CCP general secretary - Xi Jinping stressed, "reform and opening up are a never-ending process".

I want my glasnost with ice, pleaseSo what will this glasnost with Chinese characteristics really amount to? Chinese public opinion still has not had access to the details of the dragon enigma inside the riddle - or vice-versa - although everything about these reforms directly impacts the lives of 1.3 billion people. Actually the box containing the enigma is hidden inside a pyramid - reflecting a decision process monopolized by a wise and benign party elite. "Transparency", here, does not even qualify as a mirror image.

Everyone was expecting party pledges to increase the independence of the Chinese judiciary system and to keep fighting corruption and social injustice.

Everyone was expecting a softening of the 33-year-old one-child policy - allowing more couples to have a second child; that's natural, considering the CCP aims for a consumer-based economy just as the Chinese population is aging.

And for the record, this is the first time the CCP acknowledged that "both the public and private sectors are the same important components of a socialist market economy and the important bases of our nation's economic and social development".

In practice, this will mean the CCP breaking up state-sector monopolies in a few strategic industries. Private investment would be allowed, for instance, in banking, energy, infrastructure and telecommunications. This will also mean that many state-owned enterprises will cease to operate like arms of the government bureaucracy. In this case, expect fierce opposition from the proverbial entrenched interests - as in regional political elites fighting Beijing.

The CCP's master plan is to expand the Chinese middle class to more than 50% of the population by 2050 (it's currently at 12%) - equalizing more consumption with social stability. For the moment, the public sector accounts for 25% of China's GDP. Most businesses in China are public/private enterprises already - but with 25% of all private enterprises having state-owned parent companies. Only 1.3% of Chinese workers are private entrepreneurs. Two-thirds of them previously worked in the party-state system. And 20% held a leadership position in their government or local party system.

The central role of the state should not be altered by the coming reforms. After all, 40% of entrepreneurs are members of the CCP. They made a handsome profit from housing privatization. They offer no political opposition to the CCP - and will certainly profit from the reforms. What they want most of all is a more efficient system and more social justice. They harbor no regime change ideas.

Watch these comrades ripIn the end, the absolute key problem for China's next drive can easily be formulated Chinese-style; how to tweak the economy without any political reform. Even the Little Helmsman Deng Xiaoping - arguably the greatest statesman of the second part of the 20th century - repeatedly stressed that economic reform in China would not go very far without a political system reform.

In the short to medium term, it's hard to see the CCP allowing the caprices of the Goddess of the Market to shake, rattle and roll the Chinese economy at will. More "market", Western-style, will inevitably accentuate regional inequality to prohibitive levels - exactly when the CCP is trying very hard to ramp up the development of the poorer interior provinces.

The cryptic communique is of course only an abbreviated road map. It will take days, weeks and even months for its detailed implications to sink in. What's certain is that the "decisive role" of market reform implies the CCP at the helm, monitoring every step of the process.

It's like a ninja trying to tame a very powerful dragon non-stop. It will be an epic battle for the ages, to watch the CCP - an immense structural bureaucracy inbuilt in the Chinese government - perform this balancing act; matching its instincts for even stronger centralized control (not much glasnost allowed in the Internet, for example) with an explosion of social Darwinism caused by these "irrational" forces who couldn't care less about employment and social stability.

Gweilos - or foreign barbarians in general - will underestimate Chinese resolve at their own peril. When the Little Helmsman launched his own economic reform - and brand of glasnost - in 1978, he turned the CCP upside down, all around, and squared the circle; breakneck economic development providing leeway to manage political problems, and some political changes allowing for even more breakneck economic development.

So what if Xi and Li come up with a Deng remix - like inventing a new concept of market with Chinese characteristics? The sky - or China back to where it was for 18 of the past 20 centuries - is the limit.

Tuesday, November 12, 2013

PARIS - US Secretary of State John Kerry has famously stated the US "is not blind" or "stupid" in its push to clinch a historic deal over the Iranian nuclear program. [1] So now that the world has been informed, he must, cryptically, have been talking about France.

The failed Geneva negotiations this past weekend over a temporary nuclear deal at least carried the merit of revealing who is really blocking it: the axis of fear and loathing composed by the Likudniks in Israel, the House of Saud, and the Francois Hollande administration in France.

Torrents of bytes have already detailed how Israel routinely hijacks US foreign policy. Here's yet one more graphic demonstration of how Wag the Dog works. Last Friday evening, President Barack Obama called Israeli Prime Minister Bibi Netanyahu asking him not to derail Geneva. Bibi then duly picked up the phone and called, in succession, British Prime Minister David Cameron, Russian President Vladimir Putin, German Chancellor Angela Merkel and French President Hollande and asked them ... to derail Geneva.

Hollande was the only one who followed Bibi's marching orders. And all this after Kerry himself had been lectured by Bibi at Tel Aviv's Ben Gurion airport on Friday morning.

Flash forward to the coda, early Sunday morning. Not by accident, Wendy Sherman, the lead US negotiator on the Iranian nuclear dossier, a certified Israeli-firster and borderline racist, [2] flew from Geneva straight to Israel to duly "reassure" her true leader, Bibi, that no deal would be clinched.

It's no secret that Bibi and the Likudniks also run a great deal of Capitol Hill. Apart from bombing Geneva, Bibi may also rack up another temporary victory, with the US Congress about to add even more sanctions on Iran by attaching them to the National Defense Authorization Act.

Meet Bandar Fabius As far as French behavior is concerned, it is conditioned as much by the formidable Israeli lobby in Paris as hard cash from Gulf petro-monarchies.

It certainly helped that, according to The Times of Israel, French parliament member Meyer Habib - also a holder of an Israeli passport, a former official Likud spokesperson in France, and a close pal of Bibi's - called French Foreign Minister Laurent Fabius to tell him Israel would attack Iranian nuclear installations if the current deal on the table was clinched. [3]

Fabius, grandiloquent and as slippery as runny Roquefort, invoked - what else - "security concerns of Israel" to derail Geneva. Iranian President Hassan Rouhani and Foreign Minister Mohammed Javed Zarif were always extremely worried about being sabotaged by their own internal opposition, the hard line Islamic Revolutionary Guards Corps. So their number one directive was that no details of the deal should be leaked during the negotiations.

That's exactly what Fabius did. Even before Kerry landed in Geneva, Fabius was telling a French radio station that Paris would not accept a jeu des dupes ("fools' game").

The role of Fabius was pricelessly summed up by the proverbial unnamed Western diplomat telling Reuters, "The Americans, the EU and the Iranians have been working intensively for months on this proposal, and this is nothing more than an attempt by Fabius to insert himself into relevance late in the negotiations." [4]

Terabytes of spin have been asserting that Washington and Paris are playing good cop-bad cop on the Iranian dossier. Not exactly; it's more like the Gallic rooster once again showing off.

Hollande was gung-ho on bombing Damascus when Obama backed off at the 11th minute from the Pentagon's "limited" attack; Hollande was left staring at a stale bottle of Moet. On both Syria and Lebanon, Paris is unabashedly playing a mix of neocolonial hugs and kisses while sharing the bed with Israel and the House of Saud.

But why, once again, shoot itself in the foot? Paris has lost a lot of money - not to mention French jobs, via automaker Peugeot - because of the Iran sanctions dementia.

Ah, but there is always the seduction of Saudi Arabia's intelligence chief Prince Bandar bin Sultan, aka Bandar Bush, and the Gulf petro-monarchies. In a nutshell; Bandar Fabius was nothing but playing paperboy for the House of Saud. The prize: huge military contracts - aircraft, warships, missile systems - and possible construction of nuclear power plants in Saudi Arabia, a deal similar to the one energy giant French Areva clinched last year with the United Arab Emirates (UAE).

The ghost of Montaigne must be squirming; France does not do irony anymore. Iran has no right to have its own nuclear plants, but France builds them and operates them for its Wahhabi clients.

The West doing Israel's bidding makes sense; after all Israel may also be interpreted as a Western aircraft carrier in the heart of the Arab Middle East. As for France doing the Wahhabis' bidding, just follow the money - from Veolia building and operating water desalination plants in Saudi Arabia to all those Rafale fighter jets to be unloaded.

Qatar, that slavery paradise presented by FIFA with a World Cup, has already invested over US$15 billion - and counting - in France, from shares in Veolia and energy behemoth Total to construction firm Vinci, media giant Lagardere, and full control of Paris Saint Germain, home of the new King of Paris, football icon Zlatan "Ibracadabra" Ibrahimovic. Not to mention that Qatar has bought virtually every significant square inch between Madeleine and Opera in Paris.

Hollande is a joke. This week he's on the cover of the Courrier International weekly (headline: "The Art of the Fall"), with pan-European media judging him "incoherent", "paralyzed" and "incompetent" (and these are the merciful epithets). On the weekend edition of the establishment Le Figaro daily, he was being destroyed because of France's (latest) credit rating downgrade by Standard & Poor's.

King Sarko The First - aka former president Nicolas Sarkozy - must be beaming; Hollande is now the most unpopular president in French history. Paris remains great - but mostly for hordes of fleeting tourists from emerging markets, not for hordes of unemployed Parisians.

So it's Bandar Fabius to the rescue! Gulf petro-monarchy cash is the salvation. In thesis, this show of "independence" should translate into billions of euros in contracts and investments. It also helps that "incompetent" Hollande is on an official visit to Israel in the next few days.

That pivot to PersiaForget about finding details of the real reasons for this "show of independence" in French mainstream media, apart from Le Monde Diplomatique's Alain Gresh in his blog. [5]

Explanations are absolutely pathetic. France is "alone against all"; it has shown "responsibility"; it has "reaffirmed its independence". And of course all the blame lies on Kerry, who allegedly "came up with a text that nobody ever saw before". Every shill has scrambled to cast Israeli-firster Fabius as savior. And yet the Elysee Palace has stressed that Fabius was just following Hollande's orders - which, in thesis, meant renegotiating the "weak points" of the deal. Call it, essentially, "incompetent" Hollande showing Obama he's got balls.

Paris has spun that the problems with the deal concern Tehran's heavy-water reactor in Arak and its stock of medium-enriched uranium. US and Iranian diplomats had been working hard towards a compromise; Tehran would keep building the reactor over the six-month period of the interim agreement, but tests would be with dummy fuel rods and ordinary water.

Kerry was working on it until Fabius unleashed his peacock act in a long session that only finished late into Saturday morning. This led Iranian Foreign Minister Zarif to note, wryly, that the P5+1 (the United States, Britain, France, Russia and China plus Germany) needed to negotiate with each other before negotiating with Iran.

The P5+1 internal mess could seriously compromise the next round of negotiations next week in Geneva. Yet Kerry, if he noticed it, managed to change his narrative to something even more theater of the absurd; he's now blaming Iran for the non-deal. [6] It's as if, after reading the French papers, he decided to atone for his sins.

Arguably Iran has proved to the whole, real, flesh and blood "international community" that it wants a deal and it is willing to negotiate. But then there are the sanctions to be approved by the US Congress - a de facto internal American sabotage. Yet these are third-party sanctions - where other countries are "punished" by the US for trading with Iran. No one will take these seriously, starting with the Asian powers, Turkey and Russia.

For the moment, no deal may seem better than a bad deal. It might happen at the next meeting, in Geneva on November 22. Most likely, a full interim deal will happen in a few months. The Obama administration wants a deal. France, for all its posture, is irrelevant.

Worse. Paris is being "blind" and "stupid" - to adapt Kerry's words - by alienating French companies, in the energy sector, nuclear energy and manufacturing, from the fabulous possibilities unleashed by a normalized relationship between Iran and the West. If the Hollande gang believes they will be "saved" by the Wahhabis, they must be on mescal.

It may take years - and it will. But Washington will inevitably find some sort of accommodation with Iran. US corporations want it. The energy-starved West wants it. Even the US hyperpower complex wants it - as it will give it way more leeway in Southwest Asia and beyond. The axis of fear and loathing of Israel, the House of Saud and France may play spoilers - but not for long. "Pivot to Asia"? Not before a pivot to Persia.